Wisconsin Brewers Rally Fans Against ‘Alcohol Czar’ Proposal

Scott Fitzgerald cites rampant violation of unenforced state liquor laws; brewers large and small call proposed office a solution in search of a problem.

Wisconsin’s craft brewers on Wednesday rallied their supporters to mobilize against a fast-tracked Republican bill to create a new alcohol enforcement office in the state Department of Revenue.

The proposal, sponsored by Senate Majority Leader Scott Fitzgerald, was introduced Tuesday and scheduled for a public hearing Thursday morning at the state Capitol.

Senate Bill 801 calls for the creation of an Office of Alcohol Beverages Enforcement in DOR that would be headed by an “alcohol czar” on a six-year appointment by the governor.

Such a body was a major provision of a more sweeping overhaul of the state’s “three-tier” alcohol laws that never made it out of draft status last summer amid an outcry from small breweries, wineries and distillers – and their vocal supporters.

Fitzgerald told The Associated Press on Tuesday that he believes the office is needed because existing laws governing the manufacture, wholesaling and retailing of alcoholic beverages “are not being enforced, period.” He did not give any examples.

Wisconsin Brewers Guild president William Glass, president of The Brewing Projekt in Eau Claire, sent a message to members of the trade group describing the alcohol czar as a bureaucrat with no oversight and “a small army of lawyers and enforcement officers with the ability to interpret the gray area within (state law) to suit their political agenda.”

“We, the guild, are not opposed to enforcement, but we are strongly opposed to solutions in search of problems and appointees allowed to run amok without oversight,” Glass wrote.

The message encouraged brewers to urge loyal customers to call lawmakers, as well as contact local media to spread the word about the proposal and Thursday’s public hearing: “We need your fans and customers to make noise.”

The level of support for the measure was unclear Wednesday. Gov. Scott Walker, speaking to reporters in Madison, expressed tepid skepticism that the office was needed. The bill has a muscular opponent in brewing giant MillerCoors, which sent a letter to lawmakers saying the alcohol czar was unnecessary and even proposing a more modest proposal without a political appointee running the enforcement efforts.

“Creation of a new agency is a flawed solution in search of a problem that does not exist,” Paul Lucas, MillerCoors director of state government affairs, wrote in the letter.

Like many states, Wisconsin has a complicated web of laws prescribing firewalls between the three tiers: production, distribution and retail. Small brewers have long complained that they do not have fair representation at the table when the other tiers – which have more influence in the Capitol thanks to the Wisconsin Tavern League and Wisconsin Beer Distributors Association – attempt to change state law to benefit their own bottom lines at the expense of producers.

3 Sheeps Brewing Tap Room. Photo by Laura Dickinson.

Of particular concern to brewers is their ability to operate taprooms – an increasingly important part of breweries’ bottom lines that state law does not address. Glass told Milwaukee Magazine that breweries have been following guidance from DOR over the last year or two that taprooms didn’t need to send their beer through distributors. One of his major concerns about the legislation is that the alcohol czar could step in and overrule those de facto policies and interpret the vagaries of the law in ways that unfairly favor the distribution or retail tiers.

“The biggest threat I see is having to pass beer through a distributor to sell in a taproom,” Glass said. “That would effectively kill taprooms, and it could kill entire businesses.”

A second provision in the bill would create a new “resort manufacturer” class of business that would allow entities that meet a host of criteria – including hosting 300 or more guest rooms, a spa and at least 36 golf holes – to hold a license allowing the manufacture of up to 150,000 gallons of spirits.